You know that when I don't spend all the grocery budget in one month, that I carry forward the surplus into the next, and beyond. Well, we do that with all of our variable budget categories.
For instance, our natural gas budget. We use natural gas for heat, the stove top and water heating. We are currently budgeting $100 per month for natural gas. We don't need to heat the house in summer, so any of that budget not spent in a summer month gets banked for winter heating.
In past years, I've tried to build a surplus of about $600 by November 1st, to supplement our heating budget in winter. This year, I'm trying to build that surplus to $800. We have about $650 in surplus right now. If this winter proves to be milder for our area than anticipated, that surplus will carry forward to winter of 2015-2016.
We have also done this with the water bill. We budget a set amount per month, and save anything not spent for the more intensive water-usage months of summer. This year, we chose not to fill our pop-up swimming pool. So we have more in our water budget surplus than in previous years.
In addition to saving the surplus, we also "invest" the surplus. With the water surplus, we buy rain barrels, install drip irrigation and replace water hog toilets and shower heads. With the electricity budget surplus, we buy LED light bulbs and we are saving for a new garage fridge/freezer.
In budgeting areas like clothing, car repairs and family entertainment, we haven't really found ways to "invest" the surplus, but instead simply bank that amount for large expenditures like winter coats, major car repairs or family mini-vacations.
This sort of budgeting means that we're never "caught out" with big expenses. There's always a little wiggle room in the budgets to cover those unexpectedly cold winters, or replacing winter gear, or new brakes for the car.
Being prepared allows us to relax a bit about our finances.
